HECLA MINING CO/DE/

Note 1. Basis of Preparation of Financial Statements

The accompanying unaudited interim condensed consolidated financial statements of Hecla Mining Company and its subsidiaries (collectively, “Hecla,” “the Company,” “we,” “our,” or “us,” except where the context requires otherwise) have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required annually by accounting principles generally accepted in the United States of America (“GAAP”). Therefore, this information should be read in conjunction with the Company’s consolidated financial statements and notes contained in our annual report on Form 10-K for the year ended December 31, 2024. The consolidated December 31, 2024 balance sheet data was derived from our audited consolidated financial statements. The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for the fair presentation of the results for the interim periods reported. All such adjustments are, in the opinion of management, of a normal recurring nature. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Note 2. Business Segments and Sales of Products

We discover, acquire and develop mines and other mineral interests and produce and market (i) concentrates containing silver, gold, lead, zinc and copper, (ii) carbon material containing silver and gold, and (iii) doré containing silver and gold. We are currently organized and managed infour segments: Greens Creek, Lucky Friday, Keno Hill and Casa Berardi.

The Company regularly reviews its segment reporting for alignment with its strategic goals and operational structure as well as for evaluation of business performance and the allocation of resources by Hecla's President and Chief Executive Officer, who has been identified as our Chief Operating Decision Maker ("CODM"). The CODM evaluates the performance for all of our reportable segments based on segment gross profit or loss. For all segments, the CODM uses segment gross profit or loss to assess segment performance and allocate resources for each segment predominantly in the annual budget and forecasting process. The CODM considers budget to actual variances on a monthly basis when making decisions about allocating capital and personnel to the segments. Significant segment expenses that are components of total cost of goods sold and drive the financial performance of our reportable segments are (i) salaries, wages and other benefits, (ii) contractors, (iii) consumables (iv) change in product inventory and (v) other direct production costs. In further evaluating the operational performance of each segment, the CODM also considers the amount of metals production versus budget, and the grade of the metal processed.

General corporate activities not associated with operating mines and their various exploration activities, as well as idle properties and environmental remediation services in the Yukon, Canada, are presented as “other.” The nature of the items that reconcile gross profit to income before income and mining taxes are not related to our reportable segments.

The tables below present information about our reportable segments for thethree and six months ended June 30, 2025 and 2024 (in thousands):

(a) Other operating expense items include general and administrative, exploration and pre-development, ramp-up and suspension costs, provision for closed operations and environmental matters, and other operating (income) expense, net.

(a) Total cost of sales in excess of sales value are transferred to ramp-up and suspension costs.

(b) Other operating expense items include general and administrative, exploration and pre-development, ramp-up and suspension costs, provision for closed operations and environmental matters, and other operating (income) expense, net.

(a) Other operating expense items include general and administrative, exploration and pre-development, provision for closed operations and environmental matters, ramp-up and suspension costs and other operating (income) expense, net.

(a) Total cost of sales in excess of sales value are transferred to ramp-up and suspension costs.

(b) Other operating expense items include general and administrative, exploration and pre-development, ramp-up and suspension costs, provision for closed operations and environmental matters, and other operating (income) expense, net.

Other sales for thethree and six months ended June 30, 2025 and 2024 is solely comprised of revenue from our environmental remediation services subsidiary in the Yukon. Keno Hill sold $1.2 million and $2.2 million during the three and six months ended June 30, 2025, respectively, and $1.1 million and $1.5 million during the three and six months ended June 30, 2024, of precious metals concentrate to Greens Creek which is eliminated upon consolidation.

Lucky Friday's income from operations for the three and six months ended June 30, 2024 included $17.8 and $35.2 million, respectively, of business interruption and property damage insurance proceeds received during the respective period related to the fire which suspended Lucky Friday's operations from August 2023 through January 8, 2024. The insurance proceeds were recorded as part of "Other operating expense (income), net" in our Condensed Consolidated Statements of Operations and Comprehensive Income.

Sales by metal for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Sales of metals for the three and six months ended June 30, 2025 include net gains of$3.8 million and net losses of$1.3 million, respectively, on financially-settled forward contracts for silver, gold, lead and zinc and for the three and six months ended June 30, 2024 include net losses of$12.5 million and$9.4 million, respectively, on such contracts. See Note 8 for more information.

The following table presents total assets by reportable segment as of June 30, 2025 and December 31, 2024 (in thousands):

Note 3. Income and Mining Taxes

Major components of our income and mining tax for the three and six months ended June 30, 2025 and 2024 are as follows (in thousands):

The income and mining tax provision for the three and six months ended June 30, 2025 and 2024 varies from the amounts that would have resulted from applying the statutory tax rates to pre-tax income or loss due primarily to the impact of taxation in foreign jurisdictions, non-recognition of net operating losses and foreign exchange gains and losses in certain jurisdictions.

For the three and six months ended June 30, 2025, we used the annual effective tax rate method to calculate the tax provision. Valuation allowances on Nevada, Mexico and certain Canadian net operating losses were treated as discrete adjustments to the tax provision.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA permanently extends multiple tax provisions of the 2017 Tax Cuts and Jobs Act, as well as repeals, modifies and introduces various other tax provisions. We do not anticipate the OBBBA to have a material impact to the Company's consolidated financial statements. We continue to evaluate the impact the OBBBA may have on the Company as the legislation has various future effective dates.

Note 4. Employee Benefit Plans

We sponsor defined benefit pension plans covering all non-hourly U.S. employees hired prior to July 2024 and our hourly workers at the Lucky Friday mine, as well as and a Supplemental Excess Retirement Plan covering certain eligible employees.

Net periodic pension cost (benefit) for the plans consisted of the following for the three and six months ended June 30, 2025 and 2024 (in thousands):

For the three and six months ended June 30, 2025 and 2024, the service cost component of net periodic pension benefit is included in the same line items of our condensed consolidated financial statements as other employee compensation costs. The net benefit related to all other components of net periodic pension cost of $0.8 million and $1.6 million, for the three and six months ended June 30, 2025, respectively, and$1.0 million and$2.0 million, respectively, for the three and six months ended June 30, 2024, is included in other income on our condensed consolidated statements of operations and comprehensive income.

Note 5. Earnings Per Common Share

We calculate basic earnings per common share on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated using the weighted average number of shares of common stock outstanding during the period plus the effect of potential dilutive common shares during the period using the treasury stock and if-converted methods.

Potential dilutive shares of common stock include outstanding unvested restricted stock awards, deferred restricted stock units, unvested performance based units and convertible preferred stock (collectively referred to as dilutive units) for all periods in which we have reported net income. The 2025 dilutive units exclude the impact of 2,068,000 warrants exercisable at $8.02 per warrant, due to their anti-dilutive impact.

The following table represents net income per common share – basic and diluted (in thousands, except income per share):

Note 6. Stockholders’ Equity

Authorized Share Capital

At our annual meeting of shareholders on May 21, 2025, our shareholders approved an amendment to our restated certificate of incorporation increasing the number of authorized shares of our common stock from 750,000,000 to 1,250,000,000.

At-The-Market ("ATM") Equity Distribution Agreement

Pursuant to an equity distribution agreement dated February 18, 2021, we may offer and sell up to 60 million shares of our common stock from time to time to or through sales agents. Sales of the shares, if any, will be made by means of ordinary brokers transactions or as otherwise agreed between the Company and the agents as principals. Whether or not we engage in sales from time to time may depend on a variety of factors, including our share price, our cash resources, potential use of proceeds, customary black-out restrictions, and whether we have any material inside inform ation. The agreement can be terminated by us at any time. Any sales of shares under the agreement are registered under the Securities Act of 1933, as amended, pursuant to a shelf registration statement on Form S-3. During the three months ended June 30, 2025, we sold 29,008,536 shares under the agreement for proceeds of $174.1 million, net of commissions and fees of $2.7 million. There were no sales in the first quarter. See Note 13 for more information.

Stock-based Compensation Plans

The Company has stock incentive plans for executives, directors and eligible employees, under which performance shares, restricted stock and shares of common stock are granted. Stock-based compensation expense for restricted stock units and performance-based grants to employees, totaled$3.0 million and$4.9 million for the three and six months ended June 30, 2025, respectively, and$3.0 million and$4.1 million for the three and six months ended June 30, 2024, respectively. At June 30, 2025, therewas $16.1 million of unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting period of 1.6 years.

The following table summarizes the stock-based compensation grants awarded during thesix months ended June 30, 2025:

Pursuant to our directors stock plan 179,836 shares and 145,687 shares with a value of $1 million and $0.8 million were awarded to our directors and recorded as stock-based compensation expense during the three and six months ended June 30, 2025 and June 30, 2024, respectively. During the three and six months ended June 30, 2024,10,831 shares with a value $0.05 million were paid to our interim CEO as part of her compensation.

In connection with the vesting of incentive compensation, certain employees have in the past, at their election and when permitted by us, chosen to satisfy their minimum tax withholding obligations through net share settlement, pursuant to which the Company withholds the number of shares necessary to satisfy such withholding obligations and pays the obligations in cash. As a result, in the three and six months ended June 30, 2025, we withheld 151,976 shares valued at approximately $0.9 million, or approximately $5.82 pershare. During the six months ended June 30, 2024, we withheld 277,966 shares valued at approximately $1.2 million, or approximately $4.31 per share.

Common Stock Dividends

During the first two quarters of 2025, our Board of Directors have declared and we have paid a quarterly dividend of $0.00375 per common share, pursuant to our dividend policy.

Accumulated Other Comprehensive (Loss) Income, Net

The following table lists the beginning balance, quarterly activity and ending balances, net of income and mining tax, of each component of “Accumulated other comprehensive income (loss), net” (in thousands):

Note 7. Debt, Credit Agreement and Leases

Our debt as of June 30, 2025 and December 31, 2024 consisted of our 7.25% Senior Notes due February 15, 2028 (“Senior Notes”), our Series 2020-A Senior Notes due July 9, 2025 (the “IQ Notes”) and any drawn amounts on our$225 million Credit Agreement, which is described separately below. The following tables summarize our current and long-term debt balances, including principal amounts outstanding under the Credit Agreement, as of June 30, 2025 and December 31, 2024 (in thousands):

Thefollowing table summarizes the scheduled annual future payments, including interest, for our Senior Notes, IQ Notes, and finance and operating leases as of June 30, 2025 (in thousands). Operating leases are included in other current and non-current liabilities onour condensed consolidated balance sheets. The amounts for the IQ Notes are stated in U.S. dollars (“USD”) based on the USD/Canadian dollar (“CAD”) exchange rate as of June 30, 2025. See Note 13 for more information.

Credit Agreement

On May 3, 2024 we entered into an amended revolving credit agreement with various financial institutions (the "Lenders"), which provided the Company with borrowing capacity up to $225 million with a maturity date of July 21, 2028 (accelerated to August 15, 2027 if our Senior Notes are not refinanced by that date).

Proceeds of the revolving loans under the Credit Agreement may be used for general corporate purposes. The interest rate on the outstanding loans under the Credit Agreement is based on the Company’s net leverage ratio and is calculated at (i) Term Secured Overnight Financing Rate ("SOFR") plus 2% to 3.5% or (ii) Bank of America’s Base Rate plus 1% to 2.5% with Base Rate being the highest of (i) the Bank of America prime rate, (ii) the Federal Funds rate plus.50% or (iii) Term SOFR plus 1.00%. For each amount drawn, we elect whether we draw on a one, three or six month basis or annual basis for SOFR. If we elect to draw for greater than six months, we pay interest quarterly on the outstanding amount.

We are also required to pay a commitment fee of between 0.45% to 0.78750%, depending on our net leverage ratio. Letters of credit issued under the Credit Agreement bear a fee between 2.00% and 3.50% based on our net leverage ratio, as well as a fronting fee to each issuing bank at an agreed upon rate per annum on the average daily dollar amount of our letter of credit exposure.

Hecla Mining Company and certain of our subsidiaries are the borrowers under the Credit Agreement, while certain of our other subsidiaries are guarantors of the borrowers’ obligations under the Credit Agreement. As further security, the Credit Agreement is collateralized by a mortgage on the Greens Creek mine, the equity interests of subsidiaries that own the Greens Creek mine or are part of the Greens Creek Joint Venture and our subsidiary Hecla Admiralty Company (the “Greens Creek Group”), and by all of the Greens Creek Group’s rights and interests in the Greens Creek Joint Venture Agreement, and in all assets of the joint venture and of any member of the Greens Creek Group.

At June 30, 2025, we had net draws of$39.0 million outstanding at an interest rate of 6.7%, and$6.7 million of outstanding letters of credit under the Credit Agreement. Letters of credit that are outstanding reduce availability under the Credit Agreement.

We believe we were in compliance with all covenants under the Credit Agreement as of June 30, 2025.

Note 8. Derivative Instruments

General

Our current risk management policy provides that up to 75% offive years of our foreign currency, and 100% of our metals price exposure may be covered under a derivatives program, with certain other limitations. Our program also utilizes derivatives to manage price risk exposure created from when revenue is recognized from a shipment of concentrate until final settlement.

These instruments expose us to (i) credit risk in the form of non-performance by counterparties for contracts in which the contract price exceeds the spot price of the hedged commodity or foreign currency and (ii) price risk to the extent that the spot price or currency exchange rate exceeds the contract price for quantities of our production and/or forecasted costs covered under contract positions.

Foreign Currency

Our wholly-owned subsidiaries owning the Casa Berardi operation and Keno Hill operation are USD-functional entities which routinely incur expenses denominated in CAD. Such expenses expose us to exchange rate fluctuations, for which we have a program to manage our exposure to fluctuations for these subsidiaries' future operating and capital costs denominated in CAD. The program related to forecasted cash operating costs at Casa Berardi and Keno Hill utilizes forward contracts to buy CAD, and only those related to Casa Berardi are designated as cash flow hedges. As of June 30, 2025, we have a total of 274 forward contracts outstanding to buy a total of CAD $234.1 million having a notional amount of USD $170.0 million to hedge the following exposures for 2025 through 2026:

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Forecasted cash operating costs at Casa Berardi and Keno Hill of CAD $131.5 million at an average CAD-to-USD exchange rate of 1.351.

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Forecasted capital expenditures at Casa Berardi of CAD $9.5 million at an average CAD-to-USD exchange rate of 1.3421.

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Forecasted capital expenditures at Keno Hill of CAD $40.3 million at an average CAD-to-USD exchange rate of 1.4049.

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Forecasted exploration expenditures at Keno Hill of CAD $6.7 million at an average CAD-to-USD exchange rate of 1.3975.

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Forecasted Corporate costs of CAD $6.1 million at an average CAD-to-USD exchange rate of 1.3718.

As of June 30, 2025 and December 31, 2024, we recorded the following balances for the fair value of the foreign currency forward contracts (in millions):

Net unrealized losses of $1.4 million related to the effective portion of the foreign currency forward contracts designated as hedges are included in accumulated other comprehensive (loss) income as of June 30, 2025. Unrealized gains and losses will be transferred from accumulated other comprehensive (loss) income to current earnings as the underlying operating expenses are recognized. We estimate $1.2 million in net unrealized losses included in accumulated other comprehensive (loss) income as of June 30, 2025 will be reclassified to current earnings in the next twelve months.

Net realized losses of$1.0 million and$2.8 million for the three and six months ended June 30, 2025, and net realized losses of$1.1 million and$1.5 million for the three and six months ended June 30, 2024, on contracts related to underlying expenses which have been recognized were transferred from accumulated other comprehensive (loss) income and included in cost of sales and other direct production costs.

Net gains of$5.4 million and$5.5 million for the three and six months ended June 30, 2025, and net losses of$0.5 million and$2.4 million for the three and six months ended June 30, 2024, respectively, were related to contracts not designated as hedges.

No net unrealized gains or losses related to ineffectiveness of the hedges are included in fair value adjustments, net on our consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2025 and 2024, respectively.

Metals Prices

We are currently using financially-settled forward contracts to manage our exposure to:

•

changes in prices of silver, gold, zinc and lead contained in our concentrate shipments between the time of shipment and final settlement; and

•

changes in prices of zinc and lead (but not silver and gold) contained in our forecasted future concentrate shipments.

The following tables summarize the quantities of metals committed under forward metals contracts at June 30, 2025 and December 31, 2024:

Since the first quarter of 2025, we have and continue to utilize financially-settled zero cost collars ("collars") to manage our exposure to changes in the price of silver contained in both our provisional and forecasted Keno Hill future concentrate shipments. These collars provide us a contractual right to receive at least the minimum price if market prices fall below this level, while limiting our potential gains to the maximum price under the collars, even if market prices rise higher. This strategy helps protect us from significant price drops while still allowing for some upside potential within this range. For the three and six months ended June 30, 2025, these collars had net losses of $0.8 million and $0.2 million, respectively. For accounting purposes, they are not designated as hedges.

The following table summarize the quantities of metals committed under collars at June 30, 2025.

We recorded the following balances for the fair value of the forward metals and collar contracts as of June 30, 2025 and December 31, 2024 (in millions):

Net realized and unrealized gains of$14.5 million related to the effective portion of the forward metals contracts designated as hedges were included in accumulated other comprehensive income (loss) as of June 30, 2025. Unrealized gains and losses will be transferred from accumulated other comprehensive income (loss) to current earnings as the underlying forecasted sales are recognized. We estimate $13.4 million in net realized and unrealized gains included in accumulated other comprehensive income (loss) as of June 30, 2025 would be reclassified to current earnings in the next twelve months. The realized gains arose due to cash settlement of zinc contracts prior to maturity in 2022 and zinc and lead contracts during 2023 for net proceeds of $17.4 million and $8.5 million, respectively, of which $0.2 million remains to be recognized during the remainder of the year.

We recognized anet gain of $3.3 million, including a $3.5 million gain transfe rred from accumulated other comprehensive income (loss), and a net loss of $12.5 million, including a $3.0 million gain transferred from accumulated other comprehensive income (loss) during the three months ended June 30, 2025 and 2024, respectively. We recognized a net loss of $2.0 million, including a $5.7 million gain transferred from accumulated other comprehensive income (loss), and a net loss of $9.4 million, including a $4.9 million gain transferred from accumulated other comprehensive income (loss) during the six months ended June 30, 2025 and 2024, respectively.

These gains and losses were recognized on the contracts utilized to manage exposure to prices of metals in our concentrate shipments, which are included in sales. The net losses and gains recognized on the contracts offset gains and losses related to price adjustments on our provisional concentrate sales due to changes to silver, gold, lead and zinc prices between the time of sale and final settlement.

Credit-risk-related Contingent Features

Certain of our derivative contracts contain cross default provisions which provide that a default under our Credit Agreement would cause a default under the derivative contract. As of June 30, 2025, we have not posted any collateral related to these contracts. The fair value of derivatives in a net liability position related to these agreements was $3.0 million as of June 30, 2025, which includes accrued interest but excludes any adjustment for nonperformance risk. If we were in breach of any of these provisions at June 30, 2025, we could have been required to settle our obligations under the agreements at their termination value of $3.0 million.

Note 9. Fair Value Measurement

Fair value adjustments, net is comprised of the following (in thousands):

Accounting guidance has established a hierarchy for inputs used to measure assets and liabilities at fair value on a recurring basis. The three levels included in the hierarchy are:

Level 1: quoted prices in active markets for identical assets or liabilities;

Level 2: significant other observable inputs; and

Level 3: significant unobservable inputs.

The table below sets forth our assets and liabilities that were accounted for at fair value on a recurring basis and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category (in thousands).

Cash and cash equivalents consist primarily of money market funds and are valued at cost, which approximates fair value.

Current and non-current restricted cash and cash equivalent balances consist primarily of certificates of deposit, U.S. Treasury securities, and other deposits and are valued at cost, which approximates fair value.

Our non-current investments consist of marketable equity securities of mining companies which are valued using quoted market prices for each security.

Trade accounts receivable from provisional concentrate sales are subject to final pricing and valued using quoted prices based on forward curves for the particular metals.

We use financially-settled forward contracts to manage exposure to changes in the exchange rate between USD and CAD, and the impact on CAD-denominated operating and capital costs incurred at our Casa Berardi and Keno Hill operations (see Note 8 for more information). The fair value of each contract represents the present value of the difference between the forward exchange rate for the contract settlement period as of the measurement date and the contract settlement exchange rate.

We use financially-settled forward contracts to manage the exposure to changes in prices of silver, gold, zinc and lead contained in our concentrate shipments that have not reached final settlement. We also use financially-settled forward contracts to manage the exposure to changes in prices of gold, zinc and lead contained in our forecasted future sales (see Note 8 for more information). The fair value of each forward contract represents the present value of the difference between the forward metal price for the contract settlement period as of the measurement date and the contract settlement metal price.

At June 30, 2025, our Senior Notes and IQ Notes were recorded at their carrying value of $472.6 million and $35.4 million, respectively, net of unamortized initial purchaser discount/premium and issuance costs. The estimated fair values of our Senior Notes and IQ Notes were $479.6 million and $36.8 million, respectively, at June 30, 2025. Quoted market prices, which are considered to be Level 1 inputs, are utilized to estimate fair values of the Senior Notes. Unobservable inputs which are considered to be Level 3, including an assumed current annual yield of 6.87%, are utilized to estimate the fair value of the IQ Notes. See Note 7 for more information. The Credit Agreement, which we consider to be Level 1 in the fair value hierarchy, has a carrying and fair value of$39.0 million.

Note 10. Product Inventories

Our major components of product inventories are (in thousands):

Note 11. Commitments, Contingencies and Obligations

San Mateo Creek Basin, New Mexico

In July 2018, the Environmental Protection Agency ("EPA") informed Hecla Limited that it and several other potentially responsible parties (“PRPs”) may be liable for cleanup of the San Mateo Creek Basin (“SMCB”), which is an approximately 321 square mile area in New Mexico that contains numerous legacy uranium mines and mills. At the time, the EPA stated it had incurred approximately $9.6 million in response costs. Also, in May, 2022 and August, 2024, Hecla Limited received a letter from a PRP notifying Hecla Limited that other PRPs may seek cost recovery and contribution from Hecla Limited under CERCLA for certain investigatory work performed by the PRPs at the SMCB site. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions of contamination by the various PRPs.

Carpenter Snow Creek and Barker-Hughesville Sites in Montana

In July 2010, the EPA made a formal request to Hecla for information regarding the Carpenter Snow Creek Superfund site located in Cascade County, Montana. The Carpenter Snow Creek site is located in a historical mining district, and in the early 1980s Hecla Limited leased 6 mining claims and performed limited exploration activities at the site. Hecla Limited terminated the mining lease in 1988.

In June 2011, the EPA informed Hecla Limited that it believes Hecla Limited, and several other PRPs, may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA stated in the letter that it has incurred approximately $4.5 million in response costs and estimated that total remediation costs may exceed $100 million. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning the site, including the relative contributions of contamination by various other PRPs.

In February 2017, the EPA made a formal request to Hecla for information regarding the Barker-Hughesville Mining District Superfund site located in Judith Basin and Cascade Counties, Montana. Hecla Limited submitted a response in April 2017. The Barker-Hughesville site is located in a historic mining district, and between approximately June and December 1983, Hecla Limited was party to an agreement with another mining company under which limited exploration activities occurred at or near the site.

In August 2018, the EPA informed Hecla Limited that it and several other PRPs may be liable for cleanup of the site or for costs incurred by the EPA in cleaning up the site. The EPA did not include an amount of its alleged response costs to date. Hecla Limited cannot with reasonable certainty estimate the amount or range of liability, if any, relating to this matter because of, among other reasons, the lack of information concerning past or anticipated future costs at the site and the relative contributions of contamination by various other PRPs.

Debt

See Note 7 for information on the commitments related to our debt arrangements as of June 30, 2025.

Indirect Taxes

In May 2024, our Keno Hill subsidiary received a notice of assessment ("NOA") for goods and services tax ("GST") on its 2023 sales for CAD $1,973,181 from the Canada Revenue Agency ("CRA"). As Keno Hill's sales are to a non-Canadian party, we do not believe Keno Hill is subject to collect and remit GST, and we have disputed the NOA and proposed audit adjustments. On April 30, 2025, the CRA advised that they agreed with our position and the matter is resolved.

Other Commitments

Our contractual obligations as of June 30, 2025 included open purchase orders and commitments of $12.3 million, $5.9 million, $8.4 million, $10.4 million and $4.5 million for various capital and non-capital items at Greens Creek, Lucky Friday, Keno Hill, Casa Berardi and Other, respectively. We also have total commitments of $19.7 million relating to scheduled payments on finance leases, including interest, primarily for equipment at our operations, and total commitments of $12.0 million relating to payments on operating leases (see Note 7 for more information). As part of our ongoing business and operations, we are required to provide surety bonds, bank letters of credit, and restricted deposits for various purposes, including financial support for environmental reclamation obligations and workers compensation programs. As of June 30, 2025, we had surety bonds totaling $218.9 million and letters of credit totaling$6.7 million in place as financial support for future reclamation and closure costs, self-insurance, and employee benefit plans. The obligations associated with these instruments are generally related to performance requirements that we address through ongoing operations. As the requirements are met, the beneficiary of the associated instruments cancels or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure of the sites. We believe we are in compliance with all applicable bonding requirements and will be able to satisfy future bonding requirements as they arise.

Other Contingencies

We also have certain other contingencies resulting from litigation, claims, EPA investigations, and other commitments and are subject to a variety of environmental and safety laws and regulations incident to the ordinary course of business. We currently have no basis to conclude that any or all of such contingencies will materially affect our financial position, results of operations or cash flows. However, in the future, there may be changes to these contingencies, or additional contingencies may occur, any of which might result in an accrual or a change in current accruals recorded by us, and there can be no assurance that their ultimate disposition will not have a material adverse effect on our financial position, results of operations or cash flows.

Note 12. Recent Accounting Pronouncements

Accounting Standards Updates to Become Effective in Future Periods

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures, which includes amendments to require the disclosure of certain specific costs and expenses that are included in a relevant expense caption on the face of the income statement. Specific costs and expenses that would be required to be disclosed include: purchases of inventory, employee compensation, depreciation and intangible asset amortization. Additionally, a qualitative description of other items is required, equal to the difference between the relevant expense caption and the separately disclosed specific costs. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, and are applied either prospectively or retrospectively at the option of the Company. We are evaluating the impact of the amendments on our consolidated financial statements and disclosures.

Note 13. Subsequent Events

ATM Equity Distribution Agreement

Subsequent to June 30, 2025, the Company sold an additional 6,949,792 shares under its ATM equity distribution agreement for proceeds of $42.1 million, net of commissions and fees of $0.6 million.

IQ Notes

On July 9, 2025, the Company fully repaid the IQ notes, including interest, for $33.6 million.

Dismissal of Litigation related to Klondex Acquisition

On July 17, 2025, the United States Court of Appeals for the Second Circuit.affirmed the district court’s decision to dismiss a putative class action lawsuit filed against Hecla and certain of our executive officers and directors in 2019 concerning certain public disclosures made about our Nevada assets in 2018 and 2019. We expect this to be the end of this matter. The plaintiffs in the related derivative lawsuit pending in Delaware Chancery Court have voluntarily sought to dismiss the lawsuit.

Issued Notice to Redeem Portion of 7.25% Senior Notes Due February 15, 2028

On August 1, 2025, we issued a notice of redemption to the trustee to redeem $212 million of our outstanding $475 million of Senior Notes. We expect the Senior Notes to be redeemed on a pro rata basis on or about August 21, 2025.